Top Data Center Power Stocks for Investors
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 08 2026
0mins
Source: seekingalpha
- Surging Nuclear Demand: The projected surge in AI data center energy demand positions nuclear energy producers like Constellation Energy Group (CEG) and Duke Energy (DUK) as prime long-term investment choices, especially with U.S. government backing aiming to triple nuclear power generation.
- Electricity Consumption Surge: Goldman Sachs forecasts U.S. data center electricity consumption will soar from 4% in 2023 to 10% by 2030, translating to a jump from approximately 200 TWh to 500 TWh, creating a reliability gap that only a few companies can bridge.
- Midstream Infrastructure Opportunities: Energy Transfer (ET) is aggressively capitalizing on this trend, having signed long-term contracts for over 6 billion cubic feet per day of pipeline capacity in the past year, with over 40 data center connection requests, and is expected to achieve a 1.8x coverage ratio by 2025, offering a secure 7.2% yield.
- Xcel Energy Investment Plan: Xcel Energy (XEL) is planning a $60 billion base capital investment from 2026 to 2030, up from $45 billion for 2025 to 2029, which is expected to drive 9% annual ongoing EPS growth over the next several years while providing a secure nearly 3% dividend yield.
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Analyst Views on ET
Wall Street analysts forecast ET stock price to rise
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 19.090
Low
17.00
Averages
20.65
High
23.00
Current: 19.090
Low
17.00
Averages
20.65
High
23.00
About ET
Energy Transfer LP owns and operates a diversified portfolios of energy assets in the United States, with more than 140,000 miles of pipeline and associated energy infrastructure. The Company’s strategic network spans 44 states with assets in all of the major United States production basins. Its core operations include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; and NGL fractionation. The Company’s segments include intrastate transportation and storage, interstate transportation and storage, midstream, NGL and refined products transportation and services, crude oil transportation and services, investment in Sunoco LP, investment in USA Compression Partners, LP (USAC), and all other. It also owns Lake Charles LNG Company, LLC, its wholly owned subsidiary, which owns an LNG import terminal and regasification facility.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Energy Transfer's Stable Income Outlook
- Stable Revenue Model: Energy Transfer generates most of its profits by charging upstream and downstream companies 'tolls' for using its infrastructure, making its revenue model relatively insulated from volatile oil and gas prices, ensuring stable cash flow and distributions.
- Tax Efficiency Advantage: As a master limited partnership (MLP), Energy Transfer can pass tax losses onto investors, thereby reducing the tax burden on cash distributions and enhancing overall investor returns.
- Distribution Coverage Capability: Data shows that Energy Transfer's distributable cash flow (DCF) has consistently covered its annual distributions over the past five years, with an adjusted DCF of $7.58 billion in 2023, indicating the sustainability of its distributions.
- Future Earnings Expectations: Analysts expect Energy Transfer's earnings per unit (EPU) to rise from a loss of $0.24 in 2020 to $1.71 by 2028, with the current stock price of $19 still valued at less than 13 times this year's EPU, highlighting its investment attractiveness.
See More
Energy Transfer's Stability and Growth Potential
- Stable Investment Returns: Energy Transfer has delivered a total return exceeding 450% over the past decade, making it a top choice for long-term income due to its stable cash flow and distributions, despite appearing as a dull investment.
- Midstream Company Advantage: As a midstream company, Energy Transfer profits by charging 'tolls' to upstream and downstream companies, resulting in lower sensitivity to volatile oil and gas prices, which ensures a consistent cash flow.
- Tax Structure Benefits: Operating as a master limited partnership (MLP), Energy Transfer allows investors to benefit from the pass-through of tax losses, enhancing the tax efficiency of distributions and reducing the tax burden on investors.
- Earnings Growth Potential: By 2025, Energy Transfer's earnings per unit (EPU) is expected to rise from a loss of $0.24 in 2020 to a profit of $1.21, indicating strong growth potential, while the current stock price of $19 remains attractive at less than 13 times this year's EPU.
See More
Natural Gas Infrastructure Companies Poised for Growth
- Energy Transition Investment: Energy Transfer is investing $2.7 billion in the Hugh Brinson Pipeline and $5.6 billion in the Desert Southwest expansion project to support surging natural gas demand, thereby enhancing its market position in the gas infrastructure sector.
- Market Leadership: Kinder Morgan operates over 65,000 miles of gas pipelines, transporting 40% of the U.S. natural gas, and plans to invest $10 billion in new projects by 2030, which is expected to significantly boost its cash flows and dividends.
- Strategic Partnership Expansion: Williams has signed a strategic partnership with Woodside Energy to invest $1.9 billion in its Louisiana LNG project, which is expected to drive its future earnings growth to exceed 10%.
- Growing Market Demand: As demand for natural gas power generation surges, companies like Energy Transfer, Kinder Morgan, and Williams are poised to benefit from this trend, anticipating robust earnings growth and becoming top picks for investors.
See More
Energy Transfer Invests in Natural Gas Infrastructure Expansion
- Infrastructure Expansion: Energy Transfer is heavily investing in its natural gas infrastructure, planning to meet surging demand by constructing the $2.7 billion Hugh Brinson Pipeline and the $5.6 billion Desert Southwest expansion project, thereby enhancing its competitive position in the gas market.
- Growth Potential: Kinder Morgan has committed to invest $10 billion in new growth projects, with 90% related to gas infrastructure, expected to enter commercial service by 2030, driving cash flow growth and supporting future dividend increases.
- Strategic Partnership: Williams has signed a strategic partnership with Woodside Energy to invest $1.9 billion in its Louisiana LNG project, and it expects to achieve over 10% compound annual growth rate through expanding its pipeline infrastructure, significantly boosting its profitability.
- Market Demand: As natural gas becomes increasingly crucial for power generation, demand is expected to surge in the coming years, leading to robust earnings growth for leading companies like Energy Transfer, Kinder Morgan, and Williams.
See More
Midstream Energy Companies Show Strong Investment Outlook
- Energy Transformation Potential: Energy Transfer's forward EV/EBITDA multiple is just 8.5, coupled with a 7% yield and a distribution growth target of 3% to 5%, indicating strong growth potential in natural gas pipeline operations, particularly amid rising demand from AI data centers.
- Stable Dividend Growth: Enterprise Products Partners boasts a 5.7% yield and a record of increasing distributions for 27 consecutive years, and although its forward EV/EBITDA multiple exceeds 11, its conservative financial management and strong balance sheet make it a reliable long-term investment choice.
- Rapid Dividend Growth: MPLX currently offers a 7.8% yield and has increased its distribution by 12.5% annually over the past two years, with plans to continue this pace for the next two years, showcasing its strong appeal in the midstream energy sector.
- Asset Quality Improvement: MPLX is enhancing asset quality through acquisitions and divestitures, particularly in the Permian and Gulf Coast regions, and its robust organic project backlog further strengthens its growth prospects and investment attractiveness.
See More
Midstream Energy Stocks Attract Investors with High Yields
- Industry Transformation: Over the past decade, the midstream energy sector has significantly improved its financial health by reducing leverage, shifting to fee-based contracts, and increasing distribution coverage ratios, making it a more attractive investment option that is likely to draw more investor interest.
- Energy Transition Opportunities: With rising energy demand driven by AI buildout, top midstream limited partnerships (MLPs) currently trade at a forward EV/EBITDA multiple of around 11 times, a significant discount compared to 13.7 times a decade ago, indicating strong investment potential.
- Energy Transfer Projects: Energy Transfer's strong presence in the Permian Basin positions it as a key natural gas pipeline operator, with expectations for a 3% to 5% increase in distributions, further solidifying its market position.
- High Yield Growth: MPLX has increased its distribution by 12.5% over the past two years and plans to continue this pace for the next two years, with a current yield of 7.8%, making it a top income stock for investors.
See More
Energy Transfer's Stable Income Outlook
- Stable Revenue Model: Energy Transfer generates most of its profits by charging upstream and downstream companies 'tolls' for using its infrastructure, making its revenue model relatively insulated from volatile oil and gas prices, ensuring stable cash flow and distributions.
- Tax Efficiency Advantage: As a master limited partnership (MLP), Energy Transfer can pass tax losses onto investors, thereby reducing the tax burden on cash distributions and enhancing overall investor returns.
- Distribution Coverage Capability: Data shows that Energy Transfer's distributable cash flow (DCF) has consistently covered its annual distributions over the past five years, with an adjusted DCF of $7.58 billion in 2023, indicating the sustainability of its distributions.
- Future Earnings Expectations: Analysts expect Energy Transfer's earnings per unit (EPU) to rise from a loss of $0.24 in 2020 to $1.71 by 2028, with the current stock price of $19 still valued at less than 13 times this year's EPU, highlighting its investment attractiveness.
See More
Energy Transfer's Stability and Growth Potential
- Stable Investment Returns: Energy Transfer has delivered a total return exceeding 450% over the past decade, making it a top choice for long-term income due to its stable cash flow and distributions, despite appearing as a dull investment.
- Midstream Company Advantage: As a midstream company, Energy Transfer profits by charging 'tolls' to upstream and downstream companies, resulting in lower sensitivity to volatile oil and gas prices, which ensures a consistent cash flow.
- Tax Structure Benefits: Operating as a master limited partnership (MLP), Energy Transfer allows investors to benefit from the pass-through of tax losses, enhancing the tax efficiency of distributions and reducing the tax burden on investors.
- Earnings Growth Potential: By 2025, Energy Transfer's earnings per unit (EPU) is expected to rise from a loss of $0.24 in 2020 to a profit of $1.21, indicating strong growth potential, while the current stock price of $19 remains attractive at less than 13 times this year's EPU.
See More
Natural Gas Infrastructure Companies Poised for Growth
- Energy Transition Investment: Energy Transfer is investing $2.7 billion in the Hugh Brinson Pipeline and $5.6 billion in the Desert Southwest expansion project to support surging natural gas demand, thereby enhancing its market position in the gas infrastructure sector.
- Market Leadership: Kinder Morgan operates over 65,000 miles of gas pipelines, transporting 40% of the U.S. natural gas, and plans to invest $10 billion in new projects by 2030, which is expected to significantly boost its cash flows and dividends.
- Strategic Partnership Expansion: Williams has signed a strategic partnership with Woodside Energy to invest $1.9 billion in its Louisiana LNG project, which is expected to drive its future earnings growth to exceed 10%.
- Growing Market Demand: As demand for natural gas power generation surges, companies like Energy Transfer, Kinder Morgan, and Williams are poised to benefit from this trend, anticipating robust earnings growth and becoming top picks for investors.
See More
Energy Transfer Invests in Natural Gas Infrastructure Expansion
- Infrastructure Expansion: Energy Transfer is heavily investing in its natural gas infrastructure, planning to meet surging demand by constructing the $2.7 billion Hugh Brinson Pipeline and the $5.6 billion Desert Southwest expansion project, thereby enhancing its competitive position in the gas market.
- Growth Potential: Kinder Morgan has committed to invest $10 billion in new growth projects, with 90% related to gas infrastructure, expected to enter commercial service by 2030, driving cash flow growth and supporting future dividend increases.
- Strategic Partnership: Williams has signed a strategic partnership with Woodside Energy to invest $1.9 billion in its Louisiana LNG project, and it expects to achieve over 10% compound annual growth rate through expanding its pipeline infrastructure, significantly boosting its profitability.
- Market Demand: As natural gas becomes increasingly crucial for power generation, demand is expected to surge in the coming years, leading to robust earnings growth for leading companies like Energy Transfer, Kinder Morgan, and Williams.
See More
Midstream Energy Companies Show Strong Investment Outlook
- Energy Transformation Potential: Energy Transfer's forward EV/EBITDA multiple is just 8.5, coupled with a 7% yield and a distribution growth target of 3% to 5%, indicating strong growth potential in natural gas pipeline operations, particularly amid rising demand from AI data centers.
- Stable Dividend Growth: Enterprise Products Partners boasts a 5.7% yield and a record of increasing distributions for 27 consecutive years, and although its forward EV/EBITDA multiple exceeds 11, its conservative financial management and strong balance sheet make it a reliable long-term investment choice.
- Rapid Dividend Growth: MPLX currently offers a 7.8% yield and has increased its distribution by 12.5% annually over the past two years, with plans to continue this pace for the next two years, showcasing its strong appeal in the midstream energy sector.
- Asset Quality Improvement: MPLX is enhancing asset quality through acquisitions and divestitures, particularly in the Permian and Gulf Coast regions, and its robust organic project backlog further strengthens its growth prospects and investment attractiveness.
See More
Midstream Energy Stocks Attract Investors with High Yields
- Industry Transformation: Over the past decade, the midstream energy sector has significantly improved its financial health by reducing leverage, shifting to fee-based contracts, and increasing distribution coverage ratios, making it a more attractive investment option that is likely to draw more investor interest.
- Energy Transition Opportunities: With rising energy demand driven by AI buildout, top midstream limited partnerships (MLPs) currently trade at a forward EV/EBITDA multiple of around 11 times, a significant discount compared to 13.7 times a decade ago, indicating strong investment potential.
- Energy Transfer Projects: Energy Transfer's strong presence in the Permian Basin positions it as a key natural gas pipeline operator, with expectations for a 3% to 5% increase in distributions, further solidifying its market position.
- High Yield Growth: MPLX has increased its distribution by 12.5% over the past two years and plans to continue this pace for the next two years, with a current yield of 7.8%, making it a top income stock for investors.
See More
